Dive Brief:

• Dollar General’s Popshelf on Wednesday announced several updates including a new store format, an updated customer loyalty program and a new app, the company said in a press release. The app is already available and the retailer plans to debut its loyalty program by the end of this year.
• The company said it also updated all its stores to its newest format to engage customers for what it called a “joyful shopping experience.” The latest iteration of the concept includes expanded offerings in cosmetics, decor, toys, books, DIY items and pet, including a “dog bone bar.” 
• By the end of this year, the company also plans to remove all Popshelf shop-in-shops from Dollar General’s DG Market stores, Pooh Vichidvongsa, senior vice president of Popshelf, said during on-stage remarks in September at the International Houseware Association’s annual Chief Housewares Executive SuperSession in Chicago.

Dive Insight:

The changes at Popshelf come about four years after parent company Dollar General opened the first store in late 2020. Since then, the chain has grown to more than 200 stores in 21 states, mostly throughout the East Coast, Midwest and South.

Shortly after debuting, the company opened locations with Popshelf shop-in-shops inside Dollar General’s DG Market stores. Vichidvongsa noted that the experiment is ending because the customer demographics are different. Specifically, “the customer going to Dollar General did not have the discretionary funds to really spend” on Popshelf’s offering, Vichidvongsa said last month.

Popshelf’s offering is built around higher margin and mostly nonconsumable merchandise, including seasonal items, houseware, party products and electronics. 

The retailer’s core customer is very different from Dollar General’s typical shopper, Vichidvongsa said last month. Popshelf began with — and is still focused on — a target customer demographic of suburban moms in their mid-40s with median incomes ranging from $50,000 to $125,000 who were looking for trendy items and elevated products. Since its launch, Vichidvongsa said they’ve found two other demographics are drawn to the banner’s concept. They are college students and single women in their 30s and 40s who like to occasionally treat themselves or are choosing to shop the store to grab a gift before heading to a party.

Now, Popshelf is adding to the customer experience with an updated app and loyalty program. Compatible with Apple and Android devices, the app allows customers to browse products, make purchases and schedule pick-ups at a nearby store. Within the app, the loyalty program will offer 10 points for each dollar spent and a $5 reward for every 1,000 points earned. Other perks include 15% birthday rewards, double points days and initial point-earning opportunities for getting the app.

“Keeping the customer at the center of all we do, we continue to provide exciting new options to increase pOpshelf’s joyful and fun experience, whether customers are in the store or on-the-go,” Vichidvongsa said in a statement. “From our new customer loyalty program and the updated app to exciting changes in our store format, these updates truly reflect our ongoing commitment to adapt to our customers’ wants and needs.”

Popshelf’s store footprint represents a small part of the company’s overall physical footprint, which stood at 20,345 stores at the end of the second quarter. Dollar General’s net sales rose 4.2% to $10.2 billion in Q2. However, same-store sales were nearly flat. As lower-income consumers continue to feel economically pressured, the company lowered its outlook last quarter.